Coats Group
Website:
Coats Group
Index:
FTSE 250
EPIC: COA
Supersector:
Industrial Goods and Services
Sector:
General Industrials
Subsector:
Diversified Industrials
Market Cap:
£1.51B
Payout Frequency: Semi-Annual
Coats Group Dividend Analysis and Summary
Dividend Declaration and Key Dates
- Final dividend per share: 2.28 US cents (up ~4% year-on-year vs 2.19c).
- Total FY25 dividend: 3.28 US cents (up 5% year-on-year).
- Ex-dividend date: 07/05/2026.
- Record date: 08/05/2026.
- Payment date: 28/05/2026.
- Currency: US cents per ordinary share.
- Dividend policy: Board aims to maintain a growing dividend, within a disciplined capital allocation framework (potential buybacks considered in future).
Coverage and Capacity
- Adjusted EPS (continuing): 9.26c ? total DPS cover ~2.8x.
- Reported EPS (continuing): 6.79c ? cover ~2.1x.
- 2025 free cash flow: $160m vs 2025 cash dividends paid of $54.1m (c.3.0x cash cover).
- Indicative cash cost of FY25 total DPS at current share count (c.1.92bn shares): ~$63m — comfortably covered by 2025 FCF.
Context from Results
- Adjusted EBIT margin improved to 19.8%; adjusted EPS broadly in line with expectations.
- Net debt (ex-lease): $815m; pro forma leverage 2.2x, expected to fall to <2.0x by end-2026.
- Upgraded medium-term targets: operating margin 21–23% and cumulative FCF of ~$1bn over five years (post interest/tax/minorities/exceptionals, pre dividends/M&A).
Analyst’s View: Sustainability, Growth and Support
- Sustainability: Dividend is well-covered on both earnings and cash metrics. Record FCF and cessation of UK pension deficit contributions strengthen ongoing cash coverage.
- Growth trajectory: DPS up 5% in line with management’s “growing dividend” stance. With upgraded margin targets and adjacency/OrthoLite growth, low-to-mid single digit DPS growth appears achievable if cash conversion remains strong.
- Support from financials/capital allocation: Strong cash generation, modest capex, and a clear leverage target (1–2x) underpin capacity to fund dividends alongside integration investments. Elevated interest costs and higher share count (equity raise) modestly temper per-share growth but do not threaten coverage.
Structural Changes and Policy Factors Relevant to Dividends
- OrthoLite acquisition (EV $770m, completed Oct 2025) funded by $450m new loans and a $322m equity raise (c.320m new shares). Near-term: higher interest and larger share count increase the cash cost of dividends; Medium-term: expected synergies ($5m in 2026; $20m by 2028) and strong cash conversion support dividend capacity.
- Exit of Americas Yarns (2025) improved Group margin by ~100bps and simplifies portfolio—positive for through-cycle cash generation.
- Divisional restructure to two divisions (Apparel and Footwear) from H1 2026 should reduce complexity; neutral-to-positive for execution and margins over time.
- UK pension buy-ins completed (2022/2024); deficit repair contributions ceased, freeing cash for dividends and growth.
Risks and Flags to Dividend Stability
- Leverage/interest: Pro forma leverage at 2.2x and higher interest costs post-acquisition; a $300m bridge facility matures Oct 2026 (extendable 12 months) ? refinancing and rate risk to monitor.
- Macro/end-market risk: Apparel/footwear demand uncertainty, tariff impacts, and supply chain risks (including the Middle East conflict) could pressure volumes.
- FX/hyperinflation: USD reporting with broad EM exposure and Turkish hyperinflation add volatility to reported results.
- Integration execution: Timely delivery of OrthoLite synergies and footprint optimisation is important for margin/FCF progression.
- Legal: Ongoing US environmental matter (Lower Passaic River) remains provisioned and appears manageable, but is a background risk.
Read more
Coats Group Annual Dividend Yield - 2.99%
Dividends Used in Calculation:
| Ex-Dividend Date |
Payment Date |
Type |
Amount |
Currency |
| 01/05/2025 |
29/05/2025 |
Final |
2.19¢ |
USX |
| 16/10/2025 |
13/11/2025 |
Interim |
1.00¢ |
USX |
Total (Annual Dividends Per Share):
2.39p
(Using exchange rate on 11/06/2026
$ = £0.75030)
Dividend Yield =
Annual Dividends Per Share (2.39p)
÷ Share Price (79.95p)
= 2.99%
Coats Group Dividend History
| Ex Dividend Date |
Payment Date |
Type |
Amount |
Currency |
| 07/05/2026 |
28/05/2026 |
Final |
2.28¢ |
USX |
| 16/10/2025 |
13/11/2025 |
Interim |
1.00¢ |
USX |
| 01/05/2025 |
29/05/2025 |
Final |
2.19¢ |
USX |
| 17/10/2024 |
14/11/2024 |
Interim |
0.93¢ |
USX |
| 02/05/2024 |
30/05/2024 |
Final |
1.99¢ |
USX |
| 19/10/2023 |
15/11/2023 |
Interim |
0.81¢ |
USX |
| 27/04/2023 |
25/05/2023 |
Final |
1.73¢ |
USX |
| 20/10/2022 |
16/11/2022 |
Interim |
0.70¢ |
USX |
| 28/04/2022 |
25/05/2022 |
Final |
1.50¢ |
USX |
| 21/10/2021 |
16/11/2021 |
Interim |
0.61¢ |
USX |
| 29/04/2021 |
25/05/2021 |
Final |
1.30¢ |
USX |
| 30/04/2020 |
26/05/2020 |
Final |
1.30¢ |
USX |
| 24/10/2019 |
15/11/2019 |
Interim |
0.55¢ |
USX |
| 02/05/2019 |
28/05/2019 |
Final |
1.16¢ |
USX |
| 25/10/2018 |
16/11/2018 |
Interim |
0.50¢ |
USX |
| 03/05/2018 |
29/05/2018 |
Final |
1.00¢ |
USX |
| 26/10/2017 |
17/11/2017 |
Interim |
0.44¢ |
USX |
| 04/05/2017 |
30/05/2017 |
Final |
0.84¢ |
USX |
| Year |
Interim |
Final |
Currency |
Total |
Change |
| 2024 |
0.930 |
1.990 |
USX |
2.920 |
14.960 |
| 2023 |
0.810 |
1.730 |
USX |
2.540 |
15.450 |
| 2022 |
0.700 |
1.500 |
USX |
2.200 |
15.180 |
| 2021 |
0.610 |
1.300 |
USX |
1.910 |
46.920 |
| 2020 |
|
1.300 |
USX |
1.300 |
-23.970 |
| 2019 |
0.550 |
1.160 |
USX |
1.710 |
14.000 |
| 2018 |
0.500 |
1.000 |
USX |
1.500 |
17.180 |
| 2017 |
0.440 |
0.840 |
USX |
1.280 |
|
Coats Group Dividend Calculator
Coats Group Dividend Growth
| Dividend Growth (1Y) |
3.44%
|
| Dividend CAGR (5Y) |
21.11%
|
| Years of Growth |
7
|
| Payout Ratio |
51.84%
|
| Buyback Yield |
-8.41%
|
| Shareholder Yield |
-5.28%
|
| P/E Ratio (TTM) | 15.94 |
|---|
| Forward P/E | 10.9 |
|---|
| P/FCF | 10.7 |
|---|
| Earnings Yield | 5.02% |
|---|
| FCF Yield | 9.35% |
|---|
| ROE | 23.94% |
|---|
| ROCE | 12.34% |
|---|
| Profit Margin | 7.06% |
|---|
| Operating Margin | 17.78% |
|---|
| Gross Margin | 39.26% |
|---|